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Friday, 11 August 2017

(The Star) Gamuda a top pick to secure East Coast Rail jobs

PETALING JAYA: Gamuda Bhd remains a top pick at CIMB Research on expectation that the construction group will be a strong contender to secure sizeable contracts to build the East Coast Rail Link (ECRL).

“We expect the tender phase to gain momentum over the coming months and reveal more colour on the tender structure,” CIMB Research said in a note to clients yesterday.

“We would also not discount the potential of earlier awards for selected packages,” it added.

Prime Minister Datuk Seri Najib Tun Razak said on Wednesday at least 30% of the contract value will be awarded to Malaysian contractors.

In terms of economic benefit, Najib said 80,000 jobs are expected to be created.

The ECRL is an electric railway project measuring 668km in length connecting the East Coast states of Kelantan, Terengganu, and Pahang to Greater Kuala Lumpur.

CIMB Research estimated that at least RM16bil worth of construction jobs would be set aside for local companies.

Under the agreement, China Communications Construction Company (CCCC) is the main contractor and it would undertake 70% of the total project.

CIMB Research pointed out that based on the past track record for rail-related awards, its assessment of potential beneficiaries of ECRL includes viaduct specialists, civil works specialists for bridges, contractors specialising in piling for rail, station contractors, cement players, and steel companies.

“While other contractors stand to benefit as well, we believe Gamuda could emerge as the biggest player for ECRL,” it said.